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In Isaac Estate v. Matuszynska, a majority of the court upheld the motion judge’s application of the doctrine of “emergency” when determining the defendants’ standard of care in a wrongful death case. The motion judge had dismissed the action by way of summary judgment. In dissent, Justice Pepall was of the view that the motion judge’s application of the “emergency” doctrine was incorrect, and that the case raised triable issues that should be determined on a full record at trial. Justice Pepall praised the Superior Court for taking Hryniak v. Mauldin to heart by trying to decide cases by way of summary judgment when possible. However, she cautioned that the goal should not be summary judgment at all costs. Some cases should still go to trial, and therefore some caution must still be exercised before a judge grants summary judgment.

In D’Addario v. Smith, a malicious prosecution case that also involved a defamation claim, the court discussed the defence of qualified privilege. It concluded that defamatory statements made to a priest about one of his parishioners were not protected by the defence of qualified privilege. The court also upheld the trial judgment which made the defendants jointly liable for the defamation because they were acting in furtherance of a common plan.

Other topics covered this week included a fee dispute between solicitor and client that also involved a claim of solicitor negligence (motion for summary judgment dismissing the solicitor’s negligence action set aside); a claim that a judgment was for misappropriation while acting in a fiduciary capacity, and therefore survived bankruptcy (the court held it did not survive); a relief from forfeiture case where the court determined that the proceeds of the court’s award belonged to the plaintiff’s trustee in bankruptcy, and not the plaintiff; a priority dispute between insurers in the MVA context; an administrative law decision in the union grievance context; and several decisions of a more procedural nature (summary judgment, dismissal for delay, amending pleadings, limitation periods).

Finally, I would like to extend one final invitation to all our readers to the Top Appeals of 2017 CLE that my partner, Lea Nebel and I will be co-chairing with Justice Epstein of the Court of Appeal. We now have over 50 people who will be attending in person and another roughly 20 people online! The deadline for registration is noon this coming Monday, so there is still time to join us.

The CLE has been scheduled as a casual evening/dinner program at the OBA offices on Toronto Street to take place this Monday, February 26, 2018. In-person registration will be at 5:30, dinner will be served at 6, and the formal program will run from 6:30 to 8pm. For those who cannot attend in person, you can participate via live webcast. Please see the program agenda for further details and to register.

There are three decisions being featured. The first is Moore v Sweet, 2017 ONCA 182, which relates to the remedy of constructive trust. That case was recently heard by the Supreme Court (decision under reserve). Counsel on that matter, David M. Smith and Jeremy Opolsky, will be our panelists, with Justice Epstein acting as moderator.

The second case is Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA. That case canvassed, summarized and clarified the law regarding when the “appropriate means” analysis under s. 5(1)(a)(iv) of the Limitation Act, 2002, can be applied to delay the start of the running of the basic two-year limitation period. Counsel for the parties on that matter, Allan Sternberg, Daniella Murynka and Michael Girard, will be our panelists.

The third decision featured is Hodge v Neinstein, 2017 ONCA 494. That case has been a catalyst behind the Law Society’s efforts to develop a standard form contingency fee agreement and disclosure obligations aimed at providing better information to clients. Counsel for the class plaintiffs, Peter Waldmann, will be joined on our panel by Bevin Shores and Audrey P. Ramsay, who are involved with the OBA and the Law Society working groups looking at this issue.

Wishing everyone a great weekend and looking forward to a great CLE on Monday.

Frank D’Addario, one of the Appellants, began a business relationship with Betty Smith and Chris Napior, the Respondents, in 2005. This relationship eventually became acrimonious. In 2006, Betty Smith complained to the O.P.P. that she had been sexually assaulted by Frank D’Addario, and he was charged. Following the laying of the charges, the Appellants, Frank and Ferne D’Addario, met with Napior’s priest, Father Kerslake, at their request and alleged that Napior (i) is the town drunk; (ii) is an alcoholic; (iii) is abusing his position with the Church; (iv) is dishonest and cannot be trusted; and (iv) falsely alleged to police that Frank D’Addario sexually assaulted Betty Smith. The sexual assault charges against D’Addario were stayed before they went to trial. He brought a claim against Smith and Napior for malicious prosecution. Smith counterclaimed for sexual assault. Napior counterclaimed against both appellants for defamation arising out of statements made to Father Kerslake.

At trial, the judge determined that Smith met the threshold for the test of non-suit for the malicious prosecution claim, and therefore did not put this issue to the jury. As well, the judge concluded that the defence of qualified privilege did not apply to the alleged defamatory statements and withdrew this defence from the jury.

Issues:

(1) Did the trial judge err in granting the respondents’ motion for non-suit?

(2) Did the trial judge err in concluding that Frank and Ferne D’Addario’s communications with Father Kerslake were not protected by the defence of qualified privilege?

(3) Did the trial judge err in permitting the allegation of joint liability for defamation to go to the jury?

Holding:

Appeal dismissed.

Reasoning:

(1) No. In applying the test on a motion for a non-suit, the question for the trial judge was whether the jury could find that Smith and Napior were liable for malicious prosecution. The first element for the test of malicious prosecution is that the proceedings must have been initiated by the defendant. Absent exceptional circumstances, the court will view the police officer who laid the charge as being the person who initiated prosecution. The test for circumstances wherein a private party can be found to have initiated prosecution is a high bar. In this case, there was no evidence that Smith or Napior interfered with or undermined the independence of the investigation. A mere false statement is not sufficient to meet the test of initiating a prosecution, as was argued by the Appellants. The only reasonable conclusion was that the constable who laid the charges was exercising her own independent discretion, therefore Smith and Napior could not be found to have initiated the prosecution.

(2) No. The appellants did not proffer any authority establishing that communications to priests are a recognized occasion protected by qualified privilege. They also failed to establish that Father Kerslake had an interest or duty in receiving the statements about Napior, and that the appellants had an interest or duty in making those statements to Father Kerslake. They therefore failed to establish this communication as a new occasion of qualified privilege.

The appellant’s had not met with Father Kerslake for a religious or spiritual purpose to support their argument that Father Kerslake’s interest was in addressing Napior’s sudden shift in behaviour as his spiritual leader. As well, the appellants, strangers to the parish, could not be said to have a corresponding to duty to make those statements to Father Kerslake.

(3) No. The respondents clearly claimed damages against both appellants in their pleadings. Allegations of joint liability for defamation were not made after the pleadings had closed. As well, given that Ferne, along with Frank, had requested the meeting with Father Kerslake, that she gave evidence that she had thought the priest should know what Napior had done, and that she acknowledged that “we” talked about Napior, there was enough reason to leave it open to the jury to conclude that the D’Addarios were acting in furtherance of a common plan to cause harm to Napior, which is the critical element of concerted action liability.

For almost five years, Aird & Berlis was retained by the appellants to represent the appellant, Oravital Inc., in what the motion judge aptly described as “acrimonious and protracted” litigation commenced in June 2010 (“the Oravital action”).

After the appellants changed lawyers, Aird & Berlis commenced an action against the appellants to recover payment of its unpaid accounts in the amount of $182,569.63. The appellants counterclaimed for $1,000,000, alleging that Aird & Berlis was negligent in its carriage of its retainer. In particular, the appellants alleged that Aird & Berlis had failed to provide them with a meaningful assessment of the potential damages in the Oravital action, which would have allowed for an earlier conclusion of the litigation and avoided the most of Aird & Berlis’ billed fees and disbursements.

Aird & Berlis successfully moved for summary judgment. The motion judge found that there was no causal link between Aird & Berlis’ failure to obtain a formal damages assessment at an earlier stage and the continuation of the Oravital action by the appellants.

Issues:

(1) Did the motion judge err in finding that there was no causal link between Aird & Berlis’ failure to obtain a formal damages assessment at an earlier stage and the continuation of the Oravital action by the appellants?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The motion judge erred in law in finding that the appellants’ principals, as sophisticated business people, were aware of the value of the damages and risks of litigation. This finding reflects a misapprehension of the solicitors’ duty of care to advise the clients about the legal basis for the damages and the risks of litigation.

The motion judge also erred in determining the claim and the counterclaim on a motion for summary judgment. In particular, the motion judge’s disposition of the issue of causation was not open to her to make on the record before her. Her findings concerning the appellants’ dominant purpose for carrying on the litigation and the assessment of their damages claim were not available on this record, even under the court’s enhanced powers pursuant to r. 20.04(2.1) of the Rules of Civil Procedure. The highly contentious inconsistencies regarding these issues could only be resolved at trial.

The appellant, Mauricio Rodriguez, appeals from the application judge’s order that declared that a default judgment against the appellant, a discharged bankrupt, was a debt within the meaning of s. 178(1)(d) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”), and therefore survives the appellant’s discharge from bankruptcy.

Section 178(1)(d) provides that a debt or liability will survive bankruptcy if it arose out of misappropriation by the bankrupt, while acting in a fiduciary capacity. In this case, the default judgment that established the appellant’s debt was based on the appellant’s failure to comply with his payment obligations under a mortgage. The pleadings relied on to secure that default judgment did not allege or disclose that the appellant had misappropriated funds in a fiduciary capacity.

In making its s. 178(1)(d) application, the respondents furnished additional and new evidence showing that the appellant had not only breached his mortgage obligation to the respondent, but had misappropriated trust funds that were paid to the appellant by mistake. It was this “extraneous” and uncontested evidence that the application judge relied on to make the s. 178(1)(d) declaration.

Issues:

1. Was it improper for the application judge to receive extraneous evidence on the s. 178(1)(d) application?

Holding: Appeal allowed.

Reasoning:

1. Yes. The court held that the debt or liability the respondent was relying on during the s. 178(1)(d) application was the judgment debt secured by the default judgment. It was therefore the nature of that debt that the application judge should have determined on the application, not whether, in addition to the wrong that led to that judgment debt, the appellant had engaged in other conduct that would qualify under s. 178(1)(d). Properly read, the court stated that the case law, which it canvassed in some detail, supports this restricted approach.

The Court reiterated that in characterizing a judgment debt under s. 178(1)(d), a judge is not confined just to the cause of action pleaded in the action that produced the judgment debt. The issue under s. 178(1)(d) relates to the substance of the judgment debt. The judge can therefore look at the material filed that led to the obtaining of the judgment debt, including the facts pleaded in support of the action that led to the judgment debt, any evidence that was presented at the time to secure that judgment debt, and any reasons that might have been given. A judge cannot, however, consider extraneous evidence not grounded in the process that produced the judgment debt. Among other reasons, it could extend the reach of the section to statute-barred claims, and violate cause of action estoppel rules. Thus, the court held that the application judge erred by going beyond the information linked to the judgment debt and considering extraneous evidence. The order made under s. 178(1)(d) was set aside, meaning the judgment debt is stayed by virtue of the bankruptcy.

Mr. Zaki, the appellant, moves to set aside the order of Epstein J.A. dismissing his motion to set aside the Registrar’s order dismissing his appeal on account of delay in perfecting it.

The underlying order at issue on the appeal struck out portions of the appellant’s statement of claim and dismissed his claim against the respondents to this motion. He took no steps to appeal that order for four months, at which time he sought an extension of time to serve and file a notice of appeal. The respondents consented to a six-month extension. The appellant then sought and obtained a further extension to perfect his appeal. He failed to perfect the appeal in a timely fashion and the Registrar dismissed his appeal for delay on October 5, 2016. The appellant took no steps to set aside the Registrar’s order for eight months. He first announced his intention to move against the Registrar’s order at a case conference at which an order was made staying his action pending the completion of certain steps, including the payment of outstanding costs owing to the respondents. The case conference order provided that a successful appeal from the order to dismiss the action against the respondents would satisfy that condition.

Issues:

1. Did the motion judge err in refusing to set aside the Registrar’s order?

Holding: Appeal dismissed.

Reasoning:

1. No. The court was not persuaded that the appellant’s mental illness fully or adequately explained his delay in moving the matter forward. As noted by the motion judge, the appellant is an intelligent and articulate individual, capable of navigating the court system. Furthermore, the court agreed with the respondents that the lengthy delays throughout this proceeding have caused them prejudice and that they were entitled to rely on the finality of the order dismissing the appeal.

The appellant appeals from the dismissal of its motion to amend its amended statement of claim. The appellant’s action arises out of the damage to its equipment that it alleges was caused by defective hydraulic lubricant manufactured by the respondent, Greenland Corporation. In paras. 5 and 6 of its original statement of claim, the appellant pleaded that damage had been caused to three excavators by the use of Greenland’s hydraulic lubricant. The appellant subsequently sought to add two additional paragraphs by way of amendment to particularize other pieces of equipment alleged to have been damaged by Greenland’s hydraulic lubricant. The motion judge did not permit the appellant to add these paragraphs for the reason that they purported to add new causes of action that she found were statute-barred.

Issues:

1. Did the motion judge err in dismissing the motion to amend the statement of claim?

Holding: Appeal allowed.

Reasoning:

1. The appellant submitted that the motion judge erred in failing to treat the reference to the three excavators in the original statement of claim and the proposed reference to the additional equipment as particulars of the appellant’s claim for damages against Greenland, rather than as individual causes of action for each piece of equipment damaged by the allegedly defective hydraulic lubricant. The Court of Appeal agreed. The motion judge erred in misinterpreting the plain meaning of the proposed amendments and the amended statement of claim, which should have been read generously in favour of the amendments.

In addition, the motion judge erred in relying on Grey Condominium Corp. No. 27 v. Blue Mountain Resorts Ltd. (2008) 90 O.R. (3d) 321 (CA), which is readily distinguishable. In Grey Condominium, there were discrete, separate construction deficiencies arising from different and unrelated factual causes. Moreover, the discovery of one of the construction deficiencies would not give rise to the discovery of the others. As a result, the court in that case concluded that each of the construction deficiencies constituted a separate cause of action, subject to separate limitation periods, not because there were separate and distinct injuries, but because the deficiencies in question were distinct. Here, by contrast, the sole cause of the same damage to all of the appellant’s affected equipment is alleged to be the hydraulic lubricant manufactured by Greenland.

For the purpose of assessing the issue of discoverability, it is the claim that is discoverable and not the full extent of the damages that the appellant may be able to recover as a result of pursuing that claim. The discovery of each piece of damaged equipment does not amount to the discovery of a separate cause of action. The sole alleged cause of the damage is the same. The motion judge erred in conflating the discovery of the claim with the discovery of the extent of the damages, and then concluding that the proposed amendments were statute-barred.

The plaintiffs appeal from the order of the motion judge that granted summary judgment dismissing their claim on the basis that the action was barred by the expiration of the two year limitation period under the Limitations Act, 2002, S.O. 2002, c 24, Sched. B.

The action arises out of an accident involving a Greyhound bus that occurred on December 23, 2000. Shaun Davis (“Davis”), a passenger on the Greyhound bus, grabbed the steering wheel of the bus, forcing it across the highway where it rolled onto its side into a ditch. Several of the bus passengers suffered injuries, and one passenger died.

They sued Davis, Albert Dolph, the driver of the bus, Greyhound Canada Transportation (“Greyhound”) as operator, Her Majesty the Queen in the Right of the Province of Ontario, the Ontario Provincial Police, and two OPP Constables, Corey Parrish and Martin Singleton.

The respondent, Lloyd’s of London, was the insurer for Greyhound and provided the defence for Greyhound and for Mr. Dolph, the bus driver. The trial in the action took place over many weeks in 2010 and 2011. The trial judgment was released on January 31, 2012. Davis did not defend the claims against him and did not participate in the litigation in any fashion.

The trial judge concluded that none of the defendants, except Davis, was liable. The plaintiffs appealed the trial judgment. They agreed to bifurcate the appeal so that, should the court dismiss their appeal as to the liability of the other defendants, there was no need to proceed with the appeal on the calculation of damages. The appeal on liability was dismissed on January 18, 2015.

The plaintiffs sought leave to appeal to the Supreme Court of Canada. However, that motion was withdrawn when the plaintiffs and the defendants, excluding Davis, who by then was deceased, reached a settlement.

At some point after obtaining judgment against Davis, and after Davis’s death in October 2014, the plaintiffs sought to recover their damages from the Motor Vehicles Accident Claims Fund, on the basis that Davis was uninsured. They were denied indemnification from that fund.

In January 2016, counsel for the plaintiffs contacted the respondent seeking payment of the plaintiffs’ damages under s. 258 of the Insurance Act, R.S.O. 1990, c. I.8 as against Davis on the basis that the respondent was the insurer for Davis. When the respondent denied that they were the insurer for Davis, a number of the original plaintiffs to the tort action then commenced this action against the respondent on February 24, 2016.

There were two issues before the motion judge. The first was whether Davis was an occupant of the Greyhound bus such that the insurance coverage for the bus would cover him. The other was whether the two-year limitation period had expired. The motion judge concluded that she could not resolve the first issue on a summary judgment motion because of the factual issues involved. On the second issue, though, the motion judge determined that the two-year limitation period had expired and thus the plaintiffs’ claim was statute-barred

Issues:

1. Was the motion judge correct in finding that the two-year limitation period had expired?

Holding: Appeal dismissed.

Reasoning:

1. Yes. The factual findings made by the motion judge that trigger the commencement of the limitation period are entitled to deference. She made no palpable and overriding error. In particular, there was nothing that prevented the appellants from pursuing recovery with respect to the judgment against Davis, once they obtained it at trial. As found by the motion judge, the appellants were well aware that the respondent had provided the insurance coverage for the Greyhound bus, and therefore any argument that that insurance provided coverage for the judgment against Davis was known to the appellants by that time, at the latest.

[Sharpe, LaForme and van Rensburg JJ.A.]

Counsel:

D Zuber and D Fiorita, for the appellant, Paul Robert Walt, by policy of insurance issued by Economical Insurance

J Schrieder and L Furukawa, for the respondent, Paul Robert Walt, by policy of insurance issued by State Farm

The driver, the defendant Paul Robert Walt, was driving the car involved in the accident with the consent of the owner, the defendant Mary La Chapelle-Stenner. The car was insured under a State Farm Automobile Insurance Policy issued to the owner (policy limit $300,000). The owner was also insured under a State Farm Personal Liability Umbrella Policy (“PLUP”) (policy limit $1 million). Walt had his own Economical Insurance Automobile Insurance Policy, with a policy limit of $1 million. On a Rule 21 motion to determine the priority in which these policies would respond to the plaintiff’s claim, the motion judge ruled that they would respond as follows: first the owner’s State Farm Auto Policy, then the driver’s Economical Insurance Auto Policy, and then the State Farm PLUP.

Issues:

(1) Pursuant to ss. 277(1) of the Insurance Act, R.S.O. 1990, c. I.8, is the State Farm PLUP an owner’s “first loss insurance” that should respond before the Economical Insurance Auto Policy, which is “excess” insurance and should respond only after the limits of the other two policies have been exhausted?

(2) Are the Economical Auto Policy and the State Farm PLUP both excess policies that, pursuant to ss. 277(2), are only required to respond for their rateable proportion of any liability exceeding the State Farm Auto Policy limits?

Holding: Appeal dismissed.

Reasoning:

(1) No. The State Farm and Economical Auto Policies are standard form OAP 1 policies covering listed vehicles and other automobiles driven by the insured. The defendant Walt was covered as the driver of the owner’s vehicle under the State Farm Auto Policy and as the driver of another vehicle under his own Economical Auto Policy. Both the State Farm and the Economical Auto policies are primary policies. Liability attaches under both policies immediately upon the occurrence of the insured event. The State Farm PLUP provides a very different form of coverage. It covers general personal liability for personal injury or property damage exceeding the coverage provided by the required underlying insurance or losses not covered by the underlying policies. The required underlying policies include automobile, recreational motor vehicle, comprehensive personal liability and watercraft liability policies. In the case of a loss arising from an automobile accident, liability under a PLUP attaches only after the coverage provided by the required underlying automobile policy has been exhausted.

Moreover, while the State Farm PLUP would provide some coverage to the owner or operator of a motor vehicle in some circumstances, it is not, within the meaning of ss. 277(1), an “owner’s policy of the kind mentioned in the definition of ‘owner’s policy’ in section 1”. The State Farm PLUP does not, by its terms, provide primary insurance for liability arising from the use of an automobile.

In support of its submission that the State Farm PLUP is primary automobile insurance, Economical attempted to rely heavily on the decision of the court in Avis Rent A Car System, Inc. v. Certas Direct Insurance Co. (2005), 75 O.R. (3d) 421, [2005] O.J. No. 1951 (C.A.), leave to appeal refused, [2005] S.C.C.A. No. 343. That case involved a commercial umbrella insurance policy issued to Avis to provide coverage in excess of two other automobile insurance policies. The court held that on the facts of that case, the umbrella policy was an “owner’s policy” within the meaning of ss. 277(1), and therefore responded as first loss insurance. However, the Avis decision is readily distinguishable from the case at bar. The umbrella policy at issue in Avis was issued in the United States by an American insurer. This court’s decision that it was an “owner’s policy” turned on the fact that the American insurer had filed an undertaking pursuant to s. 226.1 of the Insurance Act agreeing to provide the minimum statutory coverage required by Ontario’s automobile insurance scheme. The effect of the undertaking was to supersede the language of the policy and the coverage it provided and to replace it with the mandated terms of the standard Ontario automobile policy. That meant that when it came to determine how the policy responded in relation to other policies, the wording of the umbrella policy did not govern and the policy had to be treated as if it were an owner’s policy within the meaning of the Ontario automobile insurance scheme.

Economical also relies on ING Insurance Company of Canada v. Lombard General Insurance Company of Canada (2009), 94 O.R. (3d) 669 (S.C.), aff’d 2009 ONCA 570, 98 O.R. (3d) 522, leave to appeal refused, [2009] S.C.C.A. No. 384. That case involved an umbrella policy that incorporated a Standard Excess Automobile Policy SPF No. 7 endorsement, which provided coverage for excess loss related to the specific automobiles covered in the required underlying automobile insurance policies. The motion judge found that the endorsement brought the umbrella policy within the definition of an owner’s first loss policy under ss. 277(1). The case at bar is distinguishable as it does not involve a Standard Excess Automobile Policy SPF No. 7 endorsement that alters the nature of the coverage provided by an umbrella policy.

(2) No. Subsection 277(2) addresses the situation where there are overlapping non-primary policies. It does not refer to “excess insurance” in the sense of that term in ss. 277(1), but rather applies to “any other valid insurance” the insured “named in a contract” has or places. Even though the Economical Auto Policy is “excess insurance” in relation to the State Farm Auto Policy by virtue of ss. 277(1), it remains primary first loss insurance and does not fall within ss. 277(2). In the Court’s view, “any other valid insurance” must refer to insurance other than that described in ss. 277(1). The language of ss. 277(2) – “any other valid insurance, whether against liability for … or damage to an automobile or otherwise” – is distinguished from the language of ss. 277(1), which uses the term “any other valid motor vehicle liability policy” when determining the priority in which those primary policies are to respond.

[Pepall, Lauwers and Huscroft JJ.A.]

Counsel:

Kevin Egan, for the appellants

Gerard Tillmann, for the respondent Ilona Irena Matuszynska

Sonia Fabiani and Laura Emmett, for the respondent State Farm Mutual Automobile Insurance Company

Glen Isaac and Jean Lafontaine met at a London residence to arrange a drug deal. Lafontaine drove the two of them in a car owned by the respondent, Ilona Irena Matuszynska, to a darkened parking lot behind a bar in London to rendezvous with the drug dealers. An argument ensued between the two; Isaac exited Lafontaine’s car, smashed the driver’s side window and reached inside the car; the passengers in Lafontaine’s vehicle thought that Isaac had a weapon of some sort. Lafontaine drove off in a panic, with Isaac holding onto the car. Lafontaine attempted to dislodge Isaac by swerving his car and by kicking him. The car hit a curb and Isaac fell, hit his head and died.

Lafontaine was not charged with any offences relating directly to the accident, such as dangerous driving causing death. The police concluded that Isaac’s death was accidental. Judith Isaac, the deceased’s mother, commenced proceedings claiming damages pursuant to the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”) against various defendants in her personal capacity and as estate trustee of her son’s estate. The action was framed in negligence. The motion judge granted summary judgment dismissing the action at the request of State Farm Mutual Automobile Insurance Company (the statutory third party) and the respondent, Ilona Irena Matuszynska. The motion judge found Lafontaine feared for his safety and that of his passengers and reacted quickly in trying to escape. The motion judge concluded that Lafontaine could not be faulted for his reaction to Isaac’s actions, and that Isaac was the author of his own misfortune.

Issues:

(1) Did the motion judge err in applying the doctrine of emergency to find that Lafontaine did not fall short of the standard of care expected of him?

(2) Did the motion judge err in awarding costs against the FLA claimants?

Holding: Appeal dismissed.

Reasoning:

(1) No. Two elements must be established in order for the emergency doctrine to apply. First, the harm must be imminent. Second, it must be unforeseen. In these circumstances, Lafontaine was not to be held to a standard of perfection. The standard expected of him was that of an ordinarily prudent person acting in the stress of an emergency.

It was no error, much less a palpable and overriding error, for the motion judge to conclude that Lafontaine did not anticipate Isaac’s actions. The appellants’ submission is, in essence, an invitation to the court to reweigh the evidence that was before the motion judge and reach a different conclusion. That is not the role of the court on appeal.

As for the actions taken by Lafontaine, the law is not so unreasonable as to hold people to a standard of perfection in determining the appropriate standard of conduct in an emergency: Canadian Pacific Railway v. Gill et al., [1973] S.C.R. 654. In this case, the motion judge considered all of the relevant circumstances and found that the respondent acted reasonably in the context of the emergency he faced. She considered and rejected the very argument the appellants reiterate on appeal, describing it as parsing the chronology of events in minute detail. The motion judge’s findings are supported on the record that was before her.

(2) No. It is well established that costs orders are discretionary. The court will interfere with them only if the court below “has made an error in principle or if the costs award is plainly wrong”: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9. This was not the case here.

Pepall J.A. (dissenting):

(1) Yes. The motion judge did not turn her mind to the elements of the doctrine of emergency. She did not consider whether the evidence of an emergent situation was imminent, unforeseen, or unanticipated, and failed to consider the applicable law as set out in Gellie v. Naylor (1986), 55 O.R. (2d) 400 (C.A.).

In tort law, emergencies may arise in a variety of contexts. In certain intentional torts, for example, assault or trespass to property, the defences of self-defence or necessity may be available and in that way, consideration of an emergency may be appropriate. In contrast, with negligence, an emergency does not amount to a defence. Rather it informs the standard of care.

The doctrine of emergency will not apply where the emergency could have been reasonably anticipated. The motion judge failed to consider whether the evidence of antecedent conduct rendered the subsequent events imminent and reasonably foreseeable. Applying the standard of care analysis, if it was reasonably possible for Mr. Lafontaine to anticipate negligent conduct, he should not be able to rely on the doctrine to escape any liability. Having failed to consider the elements of the doctrine of emergency, the motion judge erred in granting summary judgment against the appellants on that basis.

Hryniak v. Mauldin, 2014 SCC 7 ushered in a new approach to summary judgment. This was at least in part a response to the need to provide for greater access to justice. Superior Court judges have answered the Supreme Court’s entreaty with a huge degree of professional commitment and diligence. This is to be lauded. A major goal of summary judgment is costs savings. However, the goal is not summary judgment at all costs. There will still be some cases that ought to go to trial. Some caution must be used. This is particularly so in a case such as this that involves a largely unexplored area of the law and which would benefit from the full record that a trial provides. Moreover, this summary judgment was anchored on minimal first hand evidence, unresolved contradictions in the evidence, and no recourse to viva voce evidence. In Justice Pepall’s view, the motion judge’s order dismissing the action by way of summary judgment should be set aside.

Valeria Scicluna advanced $293,685 for the purchase of a condominium unit. She subsequently lost her job and was unable to pay the balance. She was therefore in breach of the Agreement of Purchase and Sale that was in effect at the time. Ms. Scicluna sued the vendor, Solstice, for the return of $263,685, as agreed in a resale agreement of the unit that she had entered into with Solstice upon her failure to pay. Solstice countered to invoke the forfeiture provision of the original Agreement of Purchase and Sale to keep the whole of Ms. Scicluna’s advance.

The application judge granted relief from forfeiture to Ms. Scicluna but order the money be paid to Keven Thatcher and Associates Ltd., the trustee in bankruptcy of Ms. Scicluna (the “Trustee”).

Solstice appeals the decision of the application judge to grant relief from forfeiture, and Ms. Scicluna appeals the decision of the application judge to pay the money to the Trustee.

Issues:

(1) Did the application judge err in granting relief from the forfeiture clause?

(2) Did the application judge err in ordering the money paid to the Trustee?

Holding:

Appeal and cross-appeal dismissed.

Reasoning:

(1) Ms. Scicluna’s claim is governed by the 10 year limitation period in s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L. 15, not by the Limitations Act, 2002. Therefore, she brought her claim within the applicable limitation period.

The application judge was entitled to grant relief from forfeiture, as a judge has a broad discretion to do so under s. 98 of the Courts of Justice Act, R.S.O. 1990, c. C.43. As well, the decision in Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Company, [1994] 2 S.C.R. 490, does not limit a trial judge’s discretion to grant relief from forfeiture. It signals no more than that a trial judge exercising this equitable and purely discretionary remedy, is entitled to refuse relief based on unreasonable conduct alone. As well, in this case, the substantial disparity between the value of the property forfeited and the damage caused to Solstice by the breach is so manifest and so grossly disproportionate, that relief from forfeiture is patently a correct result.

(2). No. Pursuant to s. 71 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”), any right Ms. Scicluna had in the return of the deposit is property vested in the Trustee when she was assigned into bankruptcy in July 2011. The Trustee remains undischarged as bankruptcy trustee and it has released none of the bankrupt’s property. The starting point then, is that this money belongs to the Trustee, not Ms. Scicluna. It does not advance the principles of the BIA for Ms. Scicluna to advance, after her discharge, a claim that she failed to disclose to the Trustee and to then try to keep the proceeds for herself.

The underlying dispute arose out of the Hospital’s decision to close a number of beds in one of its units. The closure reduced the number of hours of work available for the Hospital’s regular part-time nurses (“RPT nurses”). The Hospital spread the reduction in hours across the schedules of all RPT nurses in the unit, regardless of their seniority. The Ontario Nurses Association (“ONA”) filed a grievance alleging that the Hospital had breached the collective agreement’s lay-off provisions, which defined a lay-off as a “reduction in a nurse’s hours of work”.

A labour arbitrator agreed with the ONA’s position and allowed the grievance. The Divisional Court set aside the arbitrator’s award on judicial review, reasoning that since the Hospital had no obligation to provide work to RPT nurses, a reduction in their working hours could not amount to a lay-off.

Issue: Did the Divisional Court err in overturning the arbitrator’s decision?

Holding: Appeal allowed.

Reasoning:

Yes. The arbitrator’s decision warranted review on a standard of reasonableness. The arbitrator’s interpretation of the collective agreement falls squarely within her area of expertise and is owed deference.

The parties agreed to bifurcate the arbitration hearing and elected not to call evidence. At the first stage of the hearing, the parties posed two questions to the arbitrator concerning the proper interpretation of the collective agreement:

(a) Does the collective agreement require the Hospital to schedule a RPT nurse up to his/her commitment to be available, regardless of whether the hours of work are available? (the “First Question”).

(b) Where a RPT nurse is scheduled less than his or her commitment to be available and has been scheduled up to his or her commitment on a previously posted schedule, does the scheduling of a RPT nurse on a subsequently posted schedule below his or her commitment to be available constitute a layoff? (the “Second Question”).

With respect to the First Question, the arbitrator held that the Hospital had no obligation to provide RPT nurses with work that was not available, but noted that there was still work to be done by RPT nurses, even if it was less work.

Turning to the Second Question, the arbitrator concluded that the Hospital had triggered the collective agreement’s lay-off provisions by reducing the working hours of its RPT nurses without regard for seniority.

The Divisional Court found the arbitrator’s decision to be unreasonable, for two reasons:

(1) It found the arbitrator’s answers to the First and Second Questions to be “internally inconsistent”. In the Divisional Court’s view, the arbitrator’s answer to the First Question correctly established that RPT nurses were not guaranteed work under the collective agreement. Given that conclusion, the Divisional Court reasoned that “an employee cannot be fairly characterized as being laid off, when the employer does not provide work.”

(2) The Divisional Court determined that the arbitrator’s answer to the Second Question was at odds with the collective agreement. The Divisional Court reasoned that the arbitrator’s ruling nullified the clear intent of Article 2.05 by elevating what was clearly intended to be a flexible system into an absolute entitlement to work.

The Court of Appeal held that these reasons did not withstand scrutiny. Specifically, it saw no inconsistency between the arbitrator’s answers to the two questions. Neither answer imposes on the Hospital an obligation to schedule RPT nurses up to their commitments when there is no work available. The arbitrator’s decision merely recognizes that if the Hospital exercises its discretion to schedule RPT nurses below their commitment, it must comply with the collective agreement’s lay-off provisions – a logical extension of the arbitrator’s answer to the First Question.

The Divisional Court placed undue focus on whether the collective agreement guarantees work to RPT nurses. Instead, the Court should have considered whether the collective agreement provides a benchmark to measure a reduction in a RPT nurse’s hours of work, thereby permitting resort to the lay-off provisions. The Hospital’s submissions on appeal also place undue emphasis on the absence of a guarantee of work for RPT nurses.

The relevant question, therefore, is whether the lay-off provisions similarly constrain the Hospital’s discretion to schedule RPT nurses below commitment. For the lay-off provisions to have such an effect, there must be some benchmark – within the agreement or otherwise – against which to measure a reduction in a RPT nurse’s hours of work. The Court of Appeal held that the arbitrator reasonably found that the collective agreement provided such a benchmark.

The Court of Appeal agreed with the arbitrator’s determination that the hours for which each RPT nurse has committed to work provides a suitable contractual benchmark for applying the layoff provisions.

Civil Decisions

[Hourigan, Roberts and Nordheimer JJ.A.]

Counsel:

Guy Sanders, appearing in person

David Silver, counsel to Aaron Wachna, former counsel to the appellant

Compare jurisdictions: Arbitration

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